Scandium International Mining's Customers Performance

SCY

SCY's Source of Revenues

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Scandium International Mining's Customers have recorded an increase in their cost of revenue by 17.09 % in the 2 quarter 2018 year on year, sequentially costs of revenue grew by 8.78 %, for the same period Scandium International Mining Corp.

Scandium International Mining's Comment on Sales, Marketing and Customers

Scandium is the 31st most abundant element in the earth’s crust (average
33 ppm), which makes it more common than lead, mercury and precious metals, but
less common than copper. Scandium has characteristics that are similar to rare
earth elements, and it is often classified as a member of that group, although
it is technically a light transition metal. Scandium occurs in nature as an oxide,
rarely occurs in concentrated quantities because it does not selectively combine
with the common ore-forming anions, and is very difficult to reduce to a pure
metal state. Scandium is typically produced and sold as scandium oxide (Sc2O3),
and is properly known as scandia.

Global annual production estimates of scandium range from 10 tonnes to 15 tonnes,
but accurate statistics are not available due to the lack of public information
from countries in which scandium is currently being produced. There are four
known, primary production sources globally today: stockpiles from the former
Zhovti Voty uranium mine in Ukraine, the rare earth mine at Bayan Obo in China,
apatite mines on the Kola Peninsula in Russia, and by-product production from
titanium dioxide (TiO2) pigmentrefiners in China.

There is no reliable pricing data on global scandium oxide trading. The U.S.
Geological Survey (“USGS”) in its latest report (February 2017)
documents the 2016 price of scandium oxide (99.99% grade) at US$4,600/kg, a
reduction of approximately 10% off the 2015 price estimate. Small quantities
of scandium oxide are currently offered on the internet by traders for prices
at this level, although product of slightly lower grade is commonly available
at lower prices. Scandium oxide grades of 95% or greater are considered commercially
suitable, with 99.9% grade used for electrical applications, and grades higher
than 99.9% reserved for science and new technical applications. Scandium oxide
grades of 95-99% are generally considered suitable for aluminum alloy applications.

Scandium oxide is typically traded in small quantities, between private parties,
and pricing is not transparent to other buyers or sellers as there is no clearing
facility as is more common with more commonly traded metals and commodities.
Prices do vary, based on purity and quantity supplied. Small sale quantities
tend to command premium prices, and large quantities (over one tonne) are simply
not available to establish appropriate commercial pricing.

Scandium can also be effectively purchased in the form of aluminum-scandium
(Al-Sc) master alloy, typically containing 2% scandium by weight. This product
is tailored for use in aluminum alloy production containing scandium. The 2017
USGS report indicates the 2016 price for Al-Sc 2% master alloy at US$340/kg.
This 2016 price estimate represents a higher estimate than the 2015 USGS average.
USGS estimated prices for Al-Sc 2% master alloy over the last five years show
significant year-by-year volatility, ranging from a low of US$ 220/kg (2012)
to a high of US$386/kg (2014).

Principal uses for scandium are in high-strength aluminum alloys, high-intensity
metal halide lamps, electronics, and laser research. Recently developed applications
include welding wire and fuel cells which are expected to be in future demand.
Approximately 15 different commercial aluminum-scandium alloys have been developed,
and some of them are used for aerospace applications. In Europe and the U.S.,
scandium-containing alloys have been evaluated for use in structural parts in
commercial airplanes, high stress parts in automobile engines and brake systems,
and high tension electrical wires. Military and aerospace applications are known
to be of interest, although with less specificity. The combination of high strength
and light weight makes aluminum-scandium alloys generally suitable for a number
of applications where existing aluminum alloys made with other metals are used
today.